Barclays PLC (BCS) said Tuesday that a pick up in Brazil's crush and the top producing country's recovering output in 2012-13 will weigh on the sugar market, even though limited exports from India are currently providing a little support.

However, the bank added that if an El Nino materializes there could be negative impacts on production in the key Center South region of Brazil and in India, with the size depending on the strength of the weather phenomenon.

Barclays expects Brazilian sugar production to recover modestly in 2012-13 as replacement of old cane plants has helped the recovery of the crop, while unseasonable rains will aid cane growth, at the expense of diluting sucrose content.

It said if the weather remains dry in August there could be further recovery in the ATR, or quantity of recoverable sugar from a metric ton of cane, while El Nino would bring increased rainfall to the Center South and would dilute the sucrose content again.

Barclays said concerns remain over the level of Indian production and export potential following weak monsoon rains and the risk of a possible El Nino. It added that rainfall this month is crucial for India's cane, and developments of the monsoon will be closely tracked to help firm up estimates on yields and sugar production.

source: foxbusiness

0 comments

This is not a company blog or website. The views and statements expressed in this blog are absolutely subjective. All content here is either copyrighted or by the mentioned news sources.

Privacy Policy | Contact Us